Intel invested over $600M and looped in Motorola for another $300M. While Motorola might recoup its investment by selling equipment to Clearwire, don’t know if Intel will be able to do the same. It is clearly one of the most risky bets Intel Capital has ever made. Hope they have some conditions to the investment, a few board seats otherwise this one looks like another Teledesic to me.

6 cities, 5 time zones, 4 countries, 10 days. Last week was quite hectic but it was great. From the exquisite towering cathedrals in St. Petersburg and Kremlin to serene Stockholm, from a midnight stroll in daylight by river Neva in St. Petersburg to 4am walk in Gamla Stan (Stockholm), from reading the subway maps in Russian to catching a soccer match in Amsterdam, the trip was quite memorable. In Moscow, I was speaking at the INTEROP conference on the topic of BRIC wireless markets  lessons, opportunities and challenges.

This note highlights some of the points discussed during the talk.

BRIC which stands for Brazil, Russia, India, and China collectively represent the biggest and fastest growing wireless subscriber block. While the sheer volumes represent enormous opportunities for the near and distant future, there are significant challenges and risks associated with these markets as well. Unprepared and naοve companies have been chewed and spat out in no time.

Of course, since Dec 2005, the growth has continued unabated. China surpassed the 400M mark while India crossed the 100M mark and both countries show signs of continued growth. India is on the verge of another surge due to rural network expansion in 2006. However, both countries have some tough 3G spectrum decisions to take care of (have been delayed several times), particularly in China where the government is favoring the controversial TD-SCDMA and carriers opting for standards such as WCDMA. With Olympics looming in Beijing, this makes for an interesting dynamics.

BRIC markets share some characteristics but are also unique in how they have progressed and in how they should be approached. The primary growth drivers with some degree of variability have been:

 Prepaid dominates

 Pent-up Rural demand

 Market reforms driving the industry

 Competitive pressures on big carriers

 Low-priced handsets

 Some of the lowest infrastructure costs

 Lowest tariffs

 Carriers profitable despite low ARPUs

As highlighted in our report Indian Wireless Market back in May, India and China are adding on an average over 5M subs per month. That is in contrast to 5M net sub adds per quarter in the US and less than a million net adds per quarter in Japan and Korea. With the penetration rate at 12% and 30% respectively for India and China, these nations will continue to add approx 60M subs per year for the next 3-5 years.

Despite the growing subscriber numbers, pressure on ARPU remains strong and the ARPU has been on the decline in all BRIC countries. Data ARPU for BRIC countries is also small compared to some of the other established markets and is bound to stay that way for the foreseeable future. We will cover worldwide ARPU trends in a forthcoming paper. Stay tuned.

Summary of Lessons and observations

 Government participation essential  Unified telecom Policy

 Highly price sensitive markets

 Data applications used as a churn-prevention tool

 Role of competitive forces an foreign investment is quite important  lowers costs to consumers which stimulates growth

 BRIC markets important for infrastructure players, not that much for application developers

 3G is in planning stages, spectrum issues need to be resolved quickly

 Considerations for other growing markets like Indonesia and US

Overall, BRIC markets represent significant opportunities but they are not for the faint-hearted. Amidst all the talk of BRIC wireless markets, it is easy to forget that US still remains and will remain the highest revenue generating market in the world for some time with close to $44B in carrier revenues in 2005, almost twice to the second player — Japan and twice of the revenues generated by the carriers in BRIC countries, combined. However, US market presents its own set of challenges and idiosyncrasies. Wireless is doing wonders in BRIC markets and there are tremendous opportunities.

There were also a couple of interesting INTEROP keynotes from Steve Wozniak and Kevin Mitnick.

Overall, it was an action packed conference, covering variety of themes including Wireless, VoIP, and Security. The trip left me longing to return to the region at the next available opportunity.

This is an incredibly important issue for China. The way it reacts and tackles the IP cases esp. the prominent will define the next 10 or more years. http://www.wirelessweek.com/article/CA6347969.html talks about Nokia’s lawsuit against Chinese manufacturers. Similar issues plague other manuf and infra players. In software, things are even worse. The way Chinese courts handle these cases - both in terms of timely decisions as well as the decisions will be critical and important to watch

It has been a fascinating week in Russia. First in St. Petersburg and then in Moscow. One thing that jumps out right away is he way Samsung (and to some extent LG) dominate the advertising billboards, just like they do in other major cities. They are clearly out to make their brand within top 2. More on my talk on BRIC wireless markets at Interop next week.

Leaving for Moscow next week to speak at Interop Moscow on the topic of BRIC wireless market.

In the past few months, wireless subscriber growth has been most explosive in BRIC - Brazil, Russia, India, and China. Most of the future growth will also come from these four countries. With China, India, and Russia adding almost 5 million subscribers a month, there are tremendous opportunities. But the markets are also fraught with risks. As such, one has to take a look at the what works and what doesn't. We will take a look at the lessons learned from the market growth in these countries and discuss the opportunities and challenges.

Visto is claiming victory against Seven Networks, citing a jury ruling that found Seven's mobile e-mail service infringes on Visto's system. In connection with the Seven announcement, the push e-mail company says it has filed a separate suit against Research In Motion

Greetings from Seoul. Smart move by Amdocs that increases their value in the chain and opens up new business areas for them that tie-up well with their billing business. Consolidation in the sector continues.

This week will be pretty exciting and busy. Monday starts off with a presentation and reception to the CTIA-bound Japanese delegation with folks from NTT DoCoMo, KDDI, Vodafone, Kyocera, Willcom, Mitsubishi, and Base. Tuesday off to Vegas for iHollywood and CTIA. Spending the day at iHollywood event and ending the day with CTIA press reception. Wed and Thu at CTIA with meetings, presentations, and of course the most interesting part - walk through the show floor. Looking forward to meeting old friends and colleagues and new faces.

After some clever marketing, Origami finally debuts or at least more details are available. At price range of $600-$1000, it is clearly not a mass market device and won’t take off. Perhaps future versions would do better.

One of the beneficiaries of the proposed AT&T/BellSouth merger will be Omnicom Group. Cingular spent over $500 million in rebranding from AT&T Wireless to Cingular Wireless. If the merger goes through, AT&T Wireless brand is likely to make a come back. Funny the way these acquisitions work.

As expected, RIM-NTP finally settled and spared potential embarrassment to the US Patent and Judicial system. The battleground now shifts to the host of lawsuits filed by Visto against rest of the wireless email vendors.

Chetan is a recognized industry expert in strategy and implementation of wireless data and pervasive computing solutions. He has a strong background in developing and launching technologies, products, and solutions for the wireless Industry, including extensive experience in managing and delivering all phases of the product development cycle. He has worked with some of the major brands and most innovative companies such as NTT DoCoMo, Qualcomm, Disney, Infospace, SAP, Hunter Douglas, AT&T Wireless, American Express, Merrill Lynch, HP, and many others.

Before starting his consulting practice, he was founding Director of Emerging Solutions practice at Luminant Worldwide. Prior to his leadership of the R&D group, Sharma served as founder and Director of Luminant’s wireless practice. In this role, he oversaw global client engagements, provided vision and strategic direction, conducted wireless research and development, and established partnerships with leading industry players such as IBM. Prior to that, Chetan was a systems engineer and product manager, focusing on mobile communications, at Cellular Technical Services, where he worked on creating RF Fingerprinting solutions to prevent wireless fraud. His work was instrumental in making a big dent in the $1B industry-wide fraud problem. He also worked at Philips Consumer Communications - a joint venture between Lucent and Philips and was VP of Technical Marketing and Technology Licensing at a wireless multimedia company.

His experience with strategic alliances involved US carriers such as Verizon, Sprint, AT&T Wireless, Cingular, Cincinnati Bell, and others; some of the most prominent carriers in Europe and Asia; IBM, Intel, Telcordia, SBC, Unisys, and many other leading players in the wireless sector.

Chetan is the author of best-seller: Wireless Internet Enterprise Applications(John Wiley & Sons, 2000) and co-author of VoiceXML: Strategies and Techniques for Effective Voice Application Development(John Wiley & Sons, 2002). His most recent book titled Wireless data services: Technologies, Business models, and Global markets was published by Cambridge University Press, UK (Jan 2004) and is a collaboration with Dr. Yasuhisa Nakamura, SVP, NTT DoCoMo. Chetan has patents in wireless communications, is regularly invited to speak at conferences worldwide, is an active member in industry bodies and committees, is interviewed frequently by leading international media publications such as WSJ Interactive, Information Week, Japan Media Review, InfoWorld, Wireless Data News etc. and has appeared on WBBN and CNBC as wireless data technology expert. Chetan has published several articles and industry reports on topics ranging from wireless multimedia to WLAN to UMTS. He has also been involved as a wireless technology expert witness in intellectual property litigation cases.

Chetan is advisor to CEOs and CTOs of some of the leading wireless technology companies on product strategy and IP development. He also sits on the advisory board of SignalLake - an early-stage telecom venture capital fund. In addition, Chetan also advises some of the largest financial institutions on wireless technology and companies in the sector. Chetan is regularly invited by various US government agencies to speak on wireless data and security related matters. He is co-chair of wireless technology committee of Integration Consortium - IC. He is a member of IEEE, IEEE Communications Society, and IEEE Computers Society, and serves on judging panel of R&D Magazine for awarding Innovations around the world each year.

Chetan has MSEE from Kansas State University and BE from Indian Institute of Technology, Roorkee.